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Microsoft Sues Alleged Click Fraudsters

Company Claims to Have Lost $750K

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Reuters and the Wall Street Journal are both reporting that Microsoft is suing three people, accusing them of click fraud. The company apparently filed a complaint on Monday in a US federal Court in Seattle.

Microsoft claims to have lost over $750,000 as the result of the actions performed by the three. "Under the scheme, large groups of people or automated computer scripts click on online advertisements without having any interest in the services or product being advertised," Reuters explains.

The 3 defendants named are Eric Lam, Gordan Lam, and Melanie Suen. Gordan Lam told WSJ he wasn’t aware of any lawsuit, and nobody seems to have been able to reach the other two. Nick Wingfield at WSJ reports:

AdCenterMicrosoft said it’s taking the action to crack down on click fraud, in which automated computer scripts or large groups of people click on online advertisements without having any interest in the services or product being advertised. The company alleges that the defendants engaged in "competitor click fraud," one form of the ruse in which a perpetrator seeks to exhaust a competitor’s advertising budget while boosting the prospects of their own advertisements. Online advertisers pay based on how many users click on their advertisements.

Microsoft said starting last year that legitimate advertisers using its online advertising service began experiencing waves of fraudulent clicks on their advertisements, which were promoting auto insurance and virtual currency used in the online game World of Warcraft. After an investigation, Microsoft said it traced the source of the allegedly fraudulent traffic back to the defendants.

It’s interesting to see the suit come so soon after the launch of Microsoft’s new search engine Bing. Although the alleged activity took place in the Live Search days, Bing is bringing a lot of new attention to Microsoft’s adCenter. It’s probably smart of Microsoft to make it clear that click fraud won’t be tolerated if Bing is anywhere near successful as what Microsoft hopes. Of course results are also used in Facebook web searches.

Microsoft Sues Alleged Click Fraudsters
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  • http://www.foxleymarketingsolutions.com Karl Foxley

    I see this as a positive step for microsoft and hopefully one that deters other fraudsters.

    I’ll be interested to learn the outcome on this one.

    Regards,

    Karl

  • http://www.fashion-in-bag.com Replica Designer Handbags

    Click Fraudsters is the bad for some ads
    Agree it.

  • Lu Lu

    WoWMine and the Super Continental companies were beneficially owned by David Guo (Guo Yao Qi) ??? the whole operation has now stopped trading. Eric Lam was just the front man or proxy. He is a Canadian citizen with a Western MBA so was the only employee of the gold farmers able to set up the credit card accounts necessary for WoWMine to operate in the west. He left the business in April 2009. David Guo’s company in China was called Guangzhou UE Digital Technology Co. Ltd. David Guo realised that the gold farming business existed at the whim of Blizzard, so created his own game with the sale of in-game items built into it. This game is Evony. Just as with the gold farming he set up a USA front company, Evony LLC. To handle the money he set up Super Continental LLC. The director of both is Lu Lu, a friend of David Guo’s and another proxy. The money from the game goes to another Super Continental company, this time in Hong Kong, which is owned by yet another Super Continental company, this time in the Marshall Islands, which is tax free and has near zero corporate disclosure. The business earns over $150,00 per day. It is Google’s fifth biggest advertiser. More here: http://arstechnica.com/gaming/news/2010/03/evony-investigating-the-game-everyone-loves-to-hate.ars
    David Guo is hiding from this whole Microsoft case so has moved to a new Guangzhou company with as misleading a name as possible: Qingdao Dragon Import & Export Co., Ltd,.